You’ve spent years creating a supportive environment for a loved one with special needs, ensuring they have access to the best care, resources, and opportunities. But as you think about the future, an essential question looms -what happens when you’re no longer there to provide that support?

Special needs estate planning offers a way to secure their well-being and financial stability, allowing you to rest assured that they’ll be taken care of for years to come.

Let’s go through what to know about special needs estate planning.

Why Special Needs Estate Planning Is Essential

Unlike traditional estate planning, which primarily focuses on wealth transfer, special needs estate planning is tailored to preserve eligibility for government benefits. These benefits often have strict asset limits, and without a specialized plan, even a small inheritance could unintentionally disqualify a person with disabilities from receiving crucial support.

A well-designed estate plan protects these benefits by managing assets, ensuring that funds are available for supplemental care without disrupting eligibility.

Parents and guardians often worry about who will take over their role and how their loved one’s future needs will be met. A comprehensive plan allows families to designate trusted individuals to manage finances, oversee medical decisions, and continue to provide for their loved one’s specific needs. Through carefully appointed guardianships, trustees, and healthcare proxies, families can maintain a sense of control and reassurance that their loved ones will be cared for.

Special needs estate planning provides financial flexibility to address various aspects of the individual’s quality of life that government programs might not cover, such as:

• Recreational activities
• Travel
• Personal enrichment

Key Components of a Special Needs Estate Plan

A comprehensive special needs estate plan includes several essential components that work together to protect the well-being, financial security, and quality of life for individuals with disabilities. One of the foundational elements is the special needs trust.

An SNT allows families to set aside funds that can be used to cover a variety of expenses.

While individuals with disabilities often have varying degrees of independence, some may need assistance making decisions. Guardianship designates a trusted person to make decisions in these areas, providing protection and oversight where needed.

Families can also establish successor guardianships. This ensures a smooth transition if the primary guardian can no longer serve. This continuity of care helps maintain the stability and support necessary for the individual’s well-being.

A power of attorney and health care proxy are also essential parts of estate planning for families. These documents allow designated individuals to handle the loved one’s financial and healthcare matters if they cannot make these decisions independently.

Funding the Special Needs Trust

Funding a Special Needs Trust is one of the most critical steps in creating a secure financial foundation for a loved one with disabilities.

Parents and caregivers often use life insurance as a reliable funding source because it can provide a guaranteed sum to the trust upon the policyholder’s passing. By making the trust the recipient of a life insurance policy, families can make sure that funds are available to support their loved one in the future.

Families may choose to fund the trust with savings, investments, or other assets. These can include:

• Cash
• Stocks
• Bonds
• Other investments

When selecting these assets, it’s essential to consider both liquidity and growth potential to ensure the trust can cover expenses over the individual’s lifetime.

Choosing Trustees

Choosing the right trustee is one of the most important decisions in special needs estate planning.

Families may first consider a close family member as trustee. A family member, particularly someone already involved in the loved one’s life, may have a deep understanding of the individual’s preferences, needs, and daily routines. This familiarity can be beneficial, especially when making decisions about spending that directly impact the loved one’s quality of life.

Appointing a professional trustee, such as a financial institution or trust company, can be a smart option. Professional trustees are well-versed in trust administration, investment management, and public benefit rules, which is invaluable for maintaining compliance with benefit requirements. These institutions have extensive experience handling trusts and can provide stability and consistency in management.

Some families find that a co-trusteeship – where a family member and a professional trustee share responsibilities – offers a balanced solution. In this arrangement, the family member provides personal insights into the loved one’s needs, while the professional trustee handles financial management and compliance.

Choose The Right Disability Estate Planning Lawyer

A lawyer with expertise in disability estate planning can help families secure their financial future. Make sure you ask plenty of questions, to ensure you and your new lawyer are on the same page.

Another key factor is the attorney’s experience with guardianship and conservatorship arrangements. Some individuals with disabilities may need assistance with medical, financial, or daily decision-making, which requires a legal guardian or conservator. An experienced lawyer can guide families through the process of establishing these roles in a way that respects the individual’s rights and autonomy.

A disability estate planning lawyer should also demonstrate empathy and a commitment to the family’s unique goals. The planning process can be highly emotional, as it often requires making decisions about future care, financial security, and personal well-being.

A compassionate lawyer will take the time to understand the family’s values, preferences, and the specific needs of the individual. They should be willing to explain complex legal concepts in a way that’s easy to understand, empowering families to make informed choices.

Consider the attorney’s network of resources and connections within the disability community. A well-connected lawyer can provide referrals to other professionals, such as:

• Financial advisors
• Care coordinators
• Life planners

who may play an important role in supporting the individual with special needs.

Special Needs Estate Planning: Invest Today

There’s a lot that goes into special needs estate planning. Hopefully, this guide will get you set up for success.

Do you need help with financial planning for special needs? Rhodes Law Firm, PC has been helping families like yours protect your future for over 40 years.

Call us to learn more.